Etsy Divests Depop to eBay: A Strategic Pivot?

The Deal: Etsy Sells Depop to eBay

In a striking development, Etsy has decided to sell Depop, the secondhand clothing app favored by Gen Z, to eBay for $1.2 billion. This move comes amid a backdrop of changing market conditions and a renewed focus on Etsy's core business.

The Background

Acquired by Etsy in 2021 for $1.6 billion, Depop quickly garnered a dedicated user base. Approximately 90% of its seven million active buyers are under the age of 34, highlighting its strong appeal among younger consumers.

This acquisition was part of Etsy's broader strategy to diversify its offerings during a multiyear spending spree that also included Reverb, a music gear site, and Elo7, a Brazilian e-commerce platform. However, both of these acquisitions have since been sold, indicating a potential misalignment with Etsy's overarching strategy.

Market Response and Strategic Rationale

The decision to divest Depop stems from Etsy's need to refocus its efforts. In 2024, Etsy's year-over-year revenue growth fell to 2.2%, down from 7.1% the previous year, forcing the company to reassess its investments. Etsy's recently appointed CEO, Kruti Patel Goyal, emphasized the need to concentrate on the Etsy marketplace itself, recognizing the pressing opportunities there.

“We are excited that this transaction allows us to focus exclusively on the compelling opportunity we see in front of us: to grow the Etsy marketplace,”

she stated, illustrating the company's strategic pivot.

What Lies Ahead for Both Companies?

For eBay, acquiring Depop presents a unique opportunity to engage directly with younger consumers, particularly women—a demographic that remains underrepresented in its marketplace. eBay CEO Jamie Iannone articulated this potential:

“Depop gives eBay access to millennials and Gen Z and young women in particular, which is still an underrepresented demographic for us.”

Moreover, the secondhand apparel market is projected to outpace traditional retail, with estimates suggesting it will grow two to three times as fast through 2027, according to McKinsey. This aligns with the growing trend of sustainable consumer behavior among younger shoppers, making Depop an attractive asset for eBay.

The Financial Implications

Despite being sold at a reduced price compared to its purchase cost, Depop has demonstrated consistent growth. The app reported $1 billion in gross merchandise sales in 2025, with U.S.-based sales surging 60% year-on-year. Etsy plans to use proceeds from the sale to initiate share buybacks, a decision that could incrementally bolster shareholder value amidst stock price declines over the past year.

Conclusion: Navigating Changing Landscapes

This strategic shift may reflect broader trends in both secondhand retail and business consolidation. As Gen Z continues to impact market dynamics and drive trends, how eBay capitalizes on its new asset will be crucial. Meanwhile, Etsy must ensure that its renewed focus on its core offerings resonates with current and prospective customers.

In these rapidly evolving times, one thing is clear: markets prompt reactions that affect not just profits, but the very people who navigate them.

For further details, visit the original article: The New York Times.